Answer / richa

Remember that earnings per share is calculated by dividing
the company's profit by the number of shares outstanding.
Warrants, stock options, convertible preferred shares, etc.
all serve to increasing the number of shares outstanding. As
a shareholder, this is a bad thing. If the denominator in
the equation (shares outstanding) is larger, the earnings
per share is reduced (the same profit figure is used in the
numerator).

This is a conservative metric because it indicates somewhat
of a worst-case scenario. On one hand, everyone holding
options, warrants, convertible preferred shares, etc. is
unlikely convert their shares all at once. At the same time,
if things go well, there is a good chance that all options
and convertibles will be converted into common stock. A big
difference in a company's EPS and diluted EPS can indicate
high potential dilution for the company's shares, an
attribute almost unanimously ostracized by analysts and
investors alike.

Answer / sg reddy

earning per share indicaes that the prapotion of profit
allocated to an individual share.
Dilluted share meen increse the no of shares by convert
debenters ,Warrants, stock options, convertible preferred
shares. its simply called as Dillution effect.
To the reason of Dilluted shares the EPS is to be decrese
to compare the normal shares.
1. Its use as one of the anty takeover policy.
2. its not a present total shares but in the time redeme.
3. the diluted EPS will always be lower than the simple EPS.
4. A big difference in a company's EPS and diluted EPS can
indicate high potential dilution for the company's shares.

Answer / venkateswarlu

divedend (each share)

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